Lila Landis is a licensed customs broker, certified U.S. export compliance officer, certified global sanctions specialist, and certified compliance and ethics professional international who has been in global compliance and logistics for over 15 years. She has worked directly with U.S. Customs and Border Protection (CBP) on focused assessments, broker compliance reviews, CTPAT validations, broker management questions, ACE testing, and Section 321 and Type 86 proposed changes. She specializes in building compliance programs and communicating complex compliance regulations in simple terms that are relevant to business.
Landis is presenting a June 12th AIAG webinar on Tariff Mitigation Strategies to help AIAG members and the automotive community explore the First Sale for Export (FSFE) program, tariff engineering and source/production changes, free trade agreements including USMCA, Mexico’s IMMEX program, and key incoterms changes. The talk will include real-world examples of product classification and origin analysis to help participants gain new ideas on how to balance cost effectiveness and compliance.
AIAG: With everything going on in international trade, you must be staying quite busy.
Landis: I'm currently providing consulting services to importers and exporters and doing a lot of work on supply chain changes in response to the tariffs. Companies are searching for ways to mitigate their risk and the increased cost of duties. The only way through this is to come together as a trade compliance community and help each other. A lot of trade compliance professionals right now are sharing resources, summaries they've prepared, and charts that they've made because it’s very, very difficult. There are no easy answers — no A plus B equals C when it comes to tariffs.
AIAG: What is the biggest challenge companies face when trying to mitigate their tariff exposure?
Landis: I think it's looking at what options they can pursue that don't completely disrupt their production. Most automotive companies have established supply chains, and they have chosen these suppliers for a reason. They are trusted, they have long-term relationships, and they know their suppliers can produce the quality of goods in the timeframe they need them.
But with the tariffs in place, companies are being asked to completely disrupt their supply chain, and that's not really easy to do in a lot of cases. Some are importing specialty items where there's not a bevy of other manufacturers that you can just plug and play with another supplier. These are highly complicated parts that they have been sourcing from a particular supplier for years. They can’t just pivot in a day and source these somewhere else.
The challenge is figuring out what steps they can take to mitigate that risk without destroying all the work they’ve done setting up high-quality, trusted suppliers that they have relied on for many years. It’s frustrating on both ends — for the buyer and the supplier. And it’s difficult because there is misinformation too. Foreign suppliers don’t want to lose their clients or suffer a huge loss and sometimes when they are trying to convince customers to stay with them, they are passing along bad information, and no one understands what’s real and what’s not.
AIAG: Tariffs are a huge subject — what will the webinar focus on?
Landis: We are going to focus on options they can review for mitigating their tariff risks. This includes practical things like reviewing the classification of your goods and looking at if there are engineering options that can change the product in a way that changes its classification. This can be a valid way to reduce duties. We’re going to look at the rule of sale for exports including the structure of how your sales is made, what intermediaries are involved, and if there are opportunities to potentially change the value that is subject to duties.
We are also going to look at country of origin and what it takes to actually change the country of origin from a customs view, which may be better than moving all your production somewhere else.
AIAG: After the webinar, what is the first thing you would like an attendee to take action on?
Landis: I would like them to talk to their procurement or sourcing department and start a conversation around the different options that they could look at. After the webinar, an attendee should be able to talk with their team about what is viable for them based on the relationship they have with their suppliers and how easily they can pivot to another supplier.
There is a natural desire on both sides not to completely abandon a relationship that has taken so much time to build and that they've put so much work into, and obviously suppliers want to protect their business and not lose their export clients. On the U.S. side, there's a lot of hesitation to go somewhere brand new to a brand-new supplier in a brand-new country that they're not as familiar doing business with. In many organizations, it can take a very long time to qualify a supplier. This webinar will help participants understand what's the minimum that they can do, and we will explore the risks and benefits associated with that. Companies are looking for options, and we are going to focus on solutions.
Register for AIAG’s Tariff Mitigation Strategies webinar with Lila Landis today.
